Stimulus: DoE readies $4.3 billion for smart grid

SAN JOSE, Calif.  The U.S. Department of Energy has 60 days to set up a competitive process to award an estimated $4.3 billion for projects that will upgrade the nation's electric grid. That's one of the top clean technology provisions of the $787 billion economic stimulus package President Barack Obama signed into law Tuesday (Feb.. 17).

Obama signed the bill against the backdrop of the Denver Museum of Nature and Science, in part to showcase its clean energy focus. As part of the trip, Obama also visited Namaste Solar, a Boulder-based maker of photovoltaics.

The stimulus package "means a lot of [smart grid] projects will move a lot faster," said Katherine Hamilton, president of the GridWise Alliance, a broad consortium of 75 companies, academics and electricity providers advocating for power grid upgrades.

The bill provides $4.3 billion that the DoE can disperse as 50 percent of the funding for any two-year smart grid projects.

"It doesn't say what you have to spend the money for, and we hope they will look at a wide variety of projects," Hamilton said."It will look different in different parts of the country because the grid looks different in different parts of the country, so we want the market not the government to dictate how this will move forward," she added.

The Alliance—whose members include GE, Google, IBM and Microsoft--estimated the funds could generate 75,000 jobs in first year of the two-year funding program.

The stimulus also includes about $100 million for smart-grid related worker training. In addition, it provides $80 million for resource assessment and $10 million for the development of new interoperability standards for the grid.

The $10 million will go to the National Institute for Standards and Technology to help implement a smart grid interoperability framework "that includes protocols and model standards for information management to achieve interoperability of smart grid devices and systems," according to the legislation.

The bill directs NIST to get input from public and private groups including the GridWise Architecture Council, the IEEE and others to build the framework. NIST must start the effort within 60 days and publish a progress report on its work within a year.

One of the big impacts of the package could be to create a more structured smart grid agency within the DoE.

"They don't even have a program [in this area], they just have an activity," said Hamilton. "I expect there will be an official program and an office" for smart grid going forward, she added.

DoE maintains a Web site on smart grid efforts, but officials were not immediately available for comment. The impact of the package likely will be front and center at the National Electricity Delivery Forum in Washington this week. Newly installed Energy Secretary Steven Chu will keynote the two-day event.

The estimated $4.3 billion is only a drop in the bucket of what is needed, according to a November 2008 report from The Brattle Group, a consulting firm.

The report, called "Transforming America's Power Industry," said that by 2030, the electric utility industry will need to make a total infrastructure investment of up to $2 trillion. An estimated $880 billion of that investment needs to be in transmission and distribution systems including smart grid projects, the report said.

Some observers already have raised warnings that the smart grid funds need to be invested in radically different kinds of projects. Kurt Yeager, executive director of The Galvin Electricity Initiative, sent Secretary Chu an open letter in December calling for funds to be directed to local microgrid projects to offset what the group sees as the unreliability of the current centralized architecture.